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LinkedIn has reportedly agreed to lease the entire 26-story building rising at 222 Second Street, on the southwest corner of Second and Howard, according to Bloomberg. The 450,000-square-foot building which is being developed by Tishman Speyer is slated to be ready for occupancy in late 2017.

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Comments from “Plugged-In” Readers

  1. Posted by Joseph A

    Question about the lot on the other side of the street , I have seen renderings that show a Tower where the small parking lot currently exists. Is the small corner lot to be part of a larger development?

  2. Posted by The Milkshake of Despair

    Didn’t LinkedIn just move into a much larger building in Sunnyvale? I’m surprised that their growth is so fast that they can support expanding into two large buildings so far apart at the same time.

  3. Posted by spencer

    awesome! go tech go!!!

  4. Posted by Brahma (incensed renter)

    So you have this, and Salesforce buying into the Transbay Tower, one more and it’s a trend.
    Hopefully that trend will end the tired cliche conventional wisdom that tech companies have to inhabit low-rise buildings with wide, flat floor plates and “open plans” (and by that I am definitely including the design that Frank Gehry produced for Facebook’s Menlo Park campus), and which in turn almost dictates that they locate themselves in low-density, suburban office parks.

  5. Posted by zzzzzz

    How much of the office space coming online the next few years has already been preleased? It seems we’re hearing about blockbuster leases on a weekly basis. And if everything gets preleased, are the developers bumping up against the Prop M limits for new entitlements?

  6. Posted by John

    I do like that the large tech companies are occupying skyscrapers downtown (like the big banks and other financial institutions and large corporations used to do before they all moved to the ‘burbs).
    But, really, what exactly does linkedin DO that it needs such a large space? Is there a there there?

  7. Posted by formidable doer of the nasty

    LinkedIn is profitable and actually has a much more sensible monetization model than, say, Yahoo or Twitter. And their business is not just the social network and premium services you see, there’s a lot going on behind the scenes in terms of big data analytics – I don’t know how much revenue comes from that at the moment, but both their data and in-house technology are extremely valuable.

  8. Posted by crispy

    @John,
    LinkedIn hires engineers, who want to live in SF rather than SV so that they can wait 20 minutes for a Blue Bottle like everyone else.
    Even if they don’t need such a large space now, they may just want to get a foot in the door and sublease to other companies until they do.

  9. Posted by emanon

    FDOTN, but what is their product and to whom are they selling it?

  10. Posted by sfjhawk

    While it is a few clicks away, here’s a quick swipe. Like any social networking site, essentially you are the product. Although, unlike facebook, Linkedin is a little bit different in that they make money in three different ways.
    1. By allowing anyone to create a profile for their professional life (as opposed a personal one for Facebook), you can connect to anyone else in your professional network who’s also done the same, essentially bringing your professional network to an online medium. From there you have an easy way to stay in touch with colleagues from years past, write (or, have them write recommendations) on yours or others behalf, etc. You can do all these basic things for free. If you want to communicate with someone you don’t know directly but it is say, one or two degrees away (e.g. that HR person you knew from a job or two ago is now working at a company you would actually like to work for and is directly connected to the hiring manager), then you have the option to pay a premium membership fee (and, hopefully get a warm introduction as opposed to writing a cold call email).
    2. 1. turns out to be a pretty good repository for recruiting firms of companies of all sizes who are looking for qualified candidates. They pay a licensing fee to have a view into network of users that you and I don’t typically have as individual users. I haven’t seen this view but I’d imagine it would a set of tools to make it easier to find a candidate based on a specific skill set and/or other parameters (e.g. find me a Customer Support Technician who speaks Portuguese and lives in the Bay Area).
    3. There’s also a third revenue stream from online advertising. There was a press release earlier this week that mentioned that Linkedin reached the 300M user mark. That’s a lot of eyeballs.
    It’s seen as a pretty resilient business model in the sense that when the economy is doing well (like these days in the Bay Area), 1) companies are paying to have access to the pool of candidates who are on Linkedin, and, 2) people who are looking to make a change from their current position are using the service (and perhaps paying a premium membership fee to gain a competitive edge). Conversely, when the economy isn’t doing so well and people are getting laid off, then they’ll definitely be using the service to find a new job.

  11. Posted by poor.ass.millionaire

    Awesome news for downtown’s migration from banking/etc. to tech. And the fact that it’s now the bigger, more established players like LinkedIn and Salesforce gives ballast to this new tech “workforce” ship. And all are my future potential tenants, yay!

  12. Posted by Wai Yip Tung

    I’ve checked LinkedIn’s job posting. They have 32 job opening in San Francisco v.s. 144 job opening in South Bay. Their San Francisco growth is quite impressive consider the company is headquartered in Mountain View for more than 10 years. On the comment regarding where engineers prefer to live, there are practical no engineering openings in San Francisco. The few SF opening are from their acquisition SlideShare.
    Still, how are they going to fill up the whole tower??

  13. Posted by The Milkshake of Despair

    “If you want to communicate with someone you don’t know directly but it is say, one or two degrees away … then you have the option to pay a premium membership fee (and, hopefully get a warm introduction as opposed to writing a cold call email”
    And this is why I don’t participate in linkedin. Even before social networks I’d get requests from people I barely know or knew only socially to give them recommendations for jobs when I had no idea about their true talents. It puts me in an awkward situation to turn them down. Like many in the Bay Area, I’m one or two degrees of separation from some really big players and don’t want people coming out of the woodwork using me as a conduit for introductions.

  14. Posted by jamie

    Good news!
    As a side note, when will we stop calling the Rincon neighborhood’s blocks between Market and Folsom “FiDi South” since Chuck Schwab and other financial companies are quickly disappearing?

  15. Posted by Wai Yip Tung

    According to SFGate, LinkedIn planned to house 2,500 employees in the building. For the context, there are 2,000 employees in the headquarter building in Mountain View today. That’s truly impressive growth.
    [Editor's Note: That's the rough capacity of the building, not necessarily the forecasted head count for LinkedIn in San Francisco.]

  16. Posted by Sausalito_res

    @Jamie
    How about “Digital District” (DiDi)?

  17. Posted by Louis

    For tech companies right now the 2 constraints are (1) hiring top people and (2) having enough RE for their forecast-ed growth.
    It may be a statement of the obvious but with the tech stock market where it is right now, projections of revenue growth and staff growth are very high and linked together. i.e. you cannot tell your growth story to the equity market if you cannot control enough RE in job centers.
    If you are in the SF office business, you have to buy into this equation, because that is what there is in SF — there is no diversified tenant mix for hi rises like there is in NYC or London. It is a concentrated investment and you are essentially a supplier to a narrow swatch of social-networking industry.
    The big question is – or will be – when the stock market in tech falters – what happens to hiring, growth projections and all the excess space that is being defensively leased right now.
    There is, conservatively, 5 MIL sq ft of office space under lease / LOI etc that will not be “occupied” on initial tenant occupancy in SF downtown / soma. call it shadow vacancy even if it is not on sublet market.
    Is it different from last time because twitter and square and airbnb and uber are long term different from b2b or webvan or scient or yahoo or jdsu etc.? Time will tell.
    Right now the answer is the one you want it to be, and clearly 95% of investors in Comm’l RE want it to be “different this time.” But I would really, really hedge an all tech portfolio.

  18. Posted by anon2

    Here’s a site with some good IPO data: http://bear.warrington.ufl.edu/ritter/IPOs2013Statistics.pdf
    p12 seems to confirm the bubbleesque disdain for profit going around.
    Thusfar in 2014, only 13% of IPO’s have been profitable, just a hair under the 14% in 1999/2000.
    What’s interesting is that 2014’s IPOs are longer in the tooth with a median age of 11 years compared with 4-5 in 1999/2000

  19. Posted by Alvin

    It’s also interesting to note that overall (although increasing since 2008) that amount of IPO’s is less than Dot Com boom (300-700s in the ’90-’01 vs. 20-200s post 2008)as well as the aggregate proceeds.

  20. Posted by moto mayhem

    Tech 5-year CAPE ratios in:
    03/00: 96
    09/02: 17
    10/07: 34
    02/09: 13
    03/14: 22
    Valuation nowhere near bubble.

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